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Health spending: Slow and steady, for now

BESIDE the riotous, relentless battle over Obamacare, a more tempered debate over health has been underway. Since the recession, health spending has grown slowly. On January 6th the number crunchers at the Centres for Medicare and Medicaid Services (CMS) released their newest annual figures. In 2012 spending rose by just 3.7%, to $2.8 trillion. That compares with growth of 9.7% in 2002. Importantly, America’s health spending in 2012 grew more slowly than its economy. The debate is whether the slowdown is merely a cyclical blip. This seemingly dry question is hugely important. Health spending threatens America’s long-term economic health, according to the Congressional Budget Office. Trends in spending will also shape the fate of an industry that accounts for nearly one-fifth of the world’s biggest economy. If the sector has seen structural changes in how individuals buy care and how doctors and firms sell it, that would be a big deal.Academics have written extensively on the subject. In May David Cutler and Nikhil Sahni of Harvard reported that the recession accounted for just 37% of the recent slowdown in health spending. They posited that more than half of the deceleration could be explained by more persistent changes, including skimpier insurance (which prompts individuals to buy less care), more efficient clinics and the slower development of pricey new …